Comments

Clive Guest

Sep 10, 2014, 11:59am

Typical of The Conversation to push their left wing barrow.
The fundamental problem is supply; supply is a problem because of the zillion planning regulations that strangle development. We live with a 'keep of the grass' (that is, fake environmental protection ahead of people's needs) mentality that simply makes housing more expensive. Not a big worry to the inner city rich who promote the green agenda, but it hits those with lower incomes, makes housing unaffordable and perversely promotes inequality!

When you say "left wing" you mean... their informed and educated academics who are the key contributors to the site?

In other words. You dislike analysis that doesn't fit your world view so you try to dismiss it by saying it is politically aligned one way or another, than actually listen to what is being stated?

No one is saying supply isn't a problem. It is listed at 7.

Generous tax incentives distort the market (and namely demand), which results in an increased price. Given significant demand side distortions and incentives exist in the Australian housing market it is completely fair to point them out as a contributor to the problem.

Slide 1 says negative gearing is worth $13.8b, but Slide 2 shows negative gearing of only around $2b - which is it?

Slide 3. Concessions for the wealthy? - Depends which side you approach it I guess. Especially when you consider that the wealthy still pay 4 times more tax than the lowest income earners, even after the "concession".

For me, Slide 7 is the only one you need. Our population growth rate is too high for our construction industry to keep up. Unfortunately neither major political party wants to reduce immigration (for fear of being labelled racist or xenophobic?)

It's not about whether they pay too much tax or not enough, it's about how much cash is available to invest in property, I.e. In this case more of it. That increases demand, which ties in with slide 7.

As for population growth being too high? Even if it were true, it would only be racist if you cut non-white immigration. It would also be racist if you assume that the majority of our population growth is coming from non-white immigrants. Extremely racist.

Negative gearing tax losses in TOTAL ($13.8 billion) is different than the amount relating to investors ($2 billion).

Slide 2 merely shows a subset of slide 1.

Slide 3. Yes. As wealthy people are the main recipients. It is a concession for the wealthy. Yes. Wealthy people pay more in tax. That is the point of having a progressive tax system. By its nature, those with higher levels of income, contribute more to the system. That is what all modern democratic taxation and transfer systems do. Now, let me put it this way, if you want to pay less tax as a wealthy person, you would need to lose the concession for it to have no negative impact on the Budget.

Slide 7. I don't think the Liberals have a problem being labelled xenophobic. It was a key policy they brought to the last election.

Slide 1 clearly says "1.3 million people negatively gear PROPERTY INVESTMENTS." and in 2012 claimed $13.8b.
Slide 2 then clearly says that the sum of CGT discounts AND negative gearing for INVESTORS is $6.8b a year"
Slide 2 cannot be a subset of 1. One of these must be wrong.

In addition, Slide 1 records claimed losses (i.e. the amount that investors lost during the year) whereas slide 2 shows value of negative gearing to investors, that is the amount they get back after the tax scales are applied.

If you claim a deduction for negative gearing of $100, the amount you get back will vary according to your top marginal rate, which varies but would typically be in the $30-50 range.

I suspect after 10 years the difference between the rent and the interest would have closed and its positively geared. The majority of people who negatively gear have only one investment property and hopefully the equity created will keep them off the pension in retirement.

this story is complete rubbish, it was noted last week that consumer affairs are looking into major real estate companies SELLING to the HIGHEST INTERNATIONAL bidder. that means people who have no right buying our land and houses are artificially putting up prices in both sales and especially rentals all so they can take the money out of the country. this practice has been going on for years, the chinese especially are buying up big then renting those properties for much higher prices which aritififally puts up the NORMAL rental prices for SUB PAR propertys. do your research before you post facts that are just rubbish you should go work for the ABBOTT government!

"... people who have no right buying our land and houses..."
What? Unless the law says otherwise, If you have the money, you have the right to buy land and houses wherever you damn well please. If I was selling my house I couldn't care less if the buyer was from down the road or on the other side of the world, as long as I sell it for an agreeable price.

Laws which were only changed recently during the GFC to prop up our unrealistic property market growth. There is no such thing as affordable housing, housing is not somewhere to live in this country, housing is a bank account for your retirement.

Umm, no. I believe the law DOES say that if you're not a permanent resident or citizen, you are restricted to buying new properties, maybe even new off-the-plan properties. That said, there was a recent story in the newspaper about how this regulation is not enforced. So, they could start by doing a better job of enforcing it.

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